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الخميس، 7 سبتمبر 2017

Lifetime Isas – which account should I open?

Lifetime Isas – which account should I open?

The Lifetime Isa (Lisa) is a great way for young people to save for their first home or to help fund the cost of retirement.

There are two versions, a – Cash and Stocks and Shares.

You can save up to £4,000 per year in a Lifetime Isa, either as a lump sum or as smaller payments throughout the year.

The scheme is designed to encourage people to save early and the government will top up your savings with a 25% bonus - up to a yearly maximum of £1,000. All earnings are tax free.

Anyone {aged between 18 and 39} can open an account. However, this means if you turned 40 on or before 6 April 2017 you are not eligible.

There are further restrictions on what you can use your Lifetime Isa for. Read the Moneywise guide to Lifetime Isas to find out more information.

If the account is right for you, here are the top deals.

Best Cash Lifetime Isa

Skipton Building Society Online Cash Lifetime Isa - 0.5%
The only provider currently offering a cash version of the Lifetime Isa is Skipton Building Society. It pays 0.5% to savers on its online-only account. On top of the government bonus, Skipton is also offering £250 cashback for customers who go on to take out a mortgage with the society.

Top Stocks and Shares Lifetime Isas

There are more options for those looking to invest using a Lifetime Isa, with many of the biggest stockbrokers already offering products.

AJ Bell, Foresters Friendly, Hargreaves Lansdown, Nutmeg, and The Share Centre are the major providers currently offering the stocks and shares equivalent.

The AJ Bell Lifetime Isa has an annual platform charge of 0.25%, plus additional fund charges. This compares with Hargreaves Lansdown’s 0.45% yearly charge on portfolios worth up to £250,000, plus additional fund charges also apply.

Nutmeg investors face a 0.75% annual charge for fully managed portfolios of up to £100,000. It charges a lower 0.45% fee for fixed allocation portfolios. Additional fund charges again apply.

The Share Centre offers three funds for investors, depending on their level of risk. There are charges of between 1.92% and 2.01% on these, including its 0.75% annual management charge.

Foresters Friendly Society has a 1.25% annual management charge but you can only invest in its own fund.

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